Posts by Matthew Poole
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Hard News: Budget 2017: How do we get…, in reply to Bart Janssen,
Low wages support businesses that are inefficient. Low wages are a disincentive for the workers to work better as opposed to longer.
Low wages are also a disincentive for the business owner to invest in technology (maybe what you meant by "work better"?). When you can get more widgets per hour by either buying a machine for $lots or by employing more workers for $peanuts, and one is an up-front capital cost while the other is an ongoing operational cost, $peanuts will generally win. If workers cost $fair, the calculus starts to tend towards the machine, which might mean some people don't get employed but also means that those who do are producing more while also being paid at a better rate.
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Timely and relevant is this piece from Bloomberg, bewailing the "threat" of the LIS catching up to the productivity gains of the last 15 years, meaning the workforce recapturing the huge increases in profit margins that US corporations have seen over that period.
Goldman Sachs Group Inc. is worried that rising pay is closing in on the productivity gains of the past 15 years, erasing the margins businesses have counted on to boost their profits
If wages converge with productivity over the next three years, profitability will shrink by about 10 percent annually, strategist Charles Himmelberg wrote in a note this week.
While classic economic theory holds that wages and productivity should move in lock step, that hasn’t been happening in recent years as an oversupply of job seekers suppressed salaries. This divergence explains the lion’s share of U.S. profit growth from 2004 through 2014, according to Goldman’s estimates. In light of tightening labor markets in the U.S., the analysts say the trend is likely to reverse -- businesses are going to have to pay their workers more and it’s not going to come with any increase in output.
“We find the prospect of what a normalization would look like to be sobering,” Himmelberg wrote. “Rising wages are a threat to corporate profit margins.”
Cry me a river.
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Hard News: Budget 2017: How do we get…, in reply to BenWilson,
But absolutely, any person not totally committed to _laissez faire_ should see that raising taxes is at least a possible thing to try.
Except that Labour and the Greens have committed to no new taxes and a cap on overall government expenditure relative to GDP. So they've strapped themselves into a straitjacket of not raising taxes, or at least not raising them to anything like the level required to deliver the standards of living and social services that we observe in the Scandinavian/Nordic parts of the world.
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Hard News: Budget 2017: How do we get…, in reply to Bart Janssen,
And I'm sure there will be a bunch of economists (spit) who present models explaining why that is wrong, it's just a pity that their models don't fit the observed data from all over the world.
It's never the fault of the models, it's always the fault of the data. The participants in the experiment failed to behave in a truly rational, self-interested manner, so the results are invalid. The model is fine, and markets are perfect, but if the participants are going to behave in an irrational manner then that's not the fault of the economists or their models. Can't be. After all, what rational person would ever not act out of pure self-interest and with full consideration of all the available information?
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Speaker: How StuffMe looked from the regions, in reply to Matthew Poole,
If you want to compare to the UK, take a look at all their cities with populations > 100k.
NZ has seven, one of which is Auckland, and if you bundle up Lower Hutt into "Wellington" it decreases to six. Bundling Lower Hutt, Porirua and Upper Hutt into "Wellington" gives you 10 urban areas big enough to be classified as "cities" by Stats NZ, four of which have populations firmly below 100k. -
With around 1.4 million residents a fair bit of stuff, some of it newsworthy, happens there. But New Zealand’s population is nearing 4.5 million; less than one third of New Zealand lives in Auckland.
Being "that guy", this is quite starkly inaccurate.
Population of NZ is projected to break 4.8m by the end of the month, population of Auckland is between 1.6m (first half of 2016) and 1.7m (projected for first-half 2018). Which means that Auckland is very definitely more than 1/3 the population, and that share is growing.
Which isn't to say that it's at all healthy for the media to obsess about Auckland to the exclusion of all else, but when the biggest city has a population that's about 20% greater than the combined population of the rest of the top-10 (with that combined total not far north of a million, and three of those cities being part of the Wellington region) it's really easy to justify on an accounting basis and a placement-of-resources basis. Especially when the other centre of focus is the political hub of a country with a pretty concentrated governance structure.
Two-thirds-ish of the population might be a lot to ignore in aggregate, but when they're spread from Bombay to Bluff and Wellsford to Cape Reinga that's a lot of very small fragments, none of whom care about any of the others' local concerns in the world according to Jennings.
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Hard News: Behind those Herald…, in reply to Joe Wylie,
Still, the poor(?) little fella seemed to genuinely believe that he was only advocating the kind of thing that they’ve been giving out Queens Service Medals and JP-hoods for.
His position seemed to be "If the agent's saying it's a 'motivated seller' or whatever, then it'd be just plain wrong to not make an offer that takes full advantage of the vendor's clearly-announced circumstances."
I think the thing that's really problematic for the various associated sponsors is the advocacy of tactics that are, prima facie, illegal. It might be a bit whiffy to pay attention to "motivated seller" or other descriptions in listings to find people who are likely to be a bit less interested in the final price vs getting money, but as he says they're getting leverage from what's in listings. His language is, shall we say, plain, but treading along the edges of ethical lines is hardly limited to property speculators.
Suggesting pack hunting with dud offers is a different kettle of fish. He even cited having used this, which means it can't just be explained away as a hypothetical.
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Hard News: Behind those Herald…, in reply to Kumara Republic,
I hope he’s a tipping point in the housing bubble debate.
His antics have cost the Auckland Property Investors' Association their ANZ sponsorship, which was quick. Apparently other sponsors are also evaluating their involvement.
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Hard News: Local journeys on the cusp of…, in reply to Gerrit,
On the diagram in the road code the advance boxes are shown in front of the pedestrian crossing. Most of the ones I have seen in Auckland the box is behind the pedestrian crossing.
I’m struggling to understand how that would work, putting the cyclists beyond the pedestrian crossing from the traffic that’s going in the same direction. Sounds like a drawing error.
Possibly the cyclist are supposed to cycle across the intersection with the pedestrian green light in the same direction? That would make a lot of sense.
Cyclists are supposed to follow the traffic signals that govern the lane in which they are riding. They’re not pedestrians. They’re also not motor vehicles, of course, but our ass of a law deems a 100W human-powered pedal-motored bicycle to be analogous to a Lamborghini that’s just come off the showroom floor.
You have to be a brave cyclist to be in the advance box with a double decker AT bus behind you whilst searching for a foot pedal on the green light.
Yup, but bicycles can have pretty amazing acceleration if the rider is halfway competent. It's a good reason to have every bus driver spend time in the saddle before getting behind the wheel, though.
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Hard News: Local journeys on the cusp of…, in reply to Bart Janssen,
How many drivers know that?
Not terribly many, I would say, given how frequently I see cars stopping well into the advance boxes.